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Price to Build a House in 2022: Fortress Home Breaks it Down for You

The final price to build a house consists of multiple layers of expenses. And instead of just providing you an average cost per square foot for different types of residential construction projects, we have decided to break down this cost to a ti.

In this Guide by Fortress Home you will find all the information you need to understand what the home building process really consists of — from land and labor costs to major communications and system costs. It would also be determined by the location of the property, the shape and size of the house, the quality of the finishes and materials you select.

By knowing what exactly the final sales price is combined with, you will be able to make your decisions more wisely, and maybe even save tens of thousands of dollars on your dream home construction costs.

New house types on the residential construction market

In this article, we will be mentioning a few types of residential buildings — and works that most builders offer. Here is a list of the most common houses in the real estate market as well as some major services that construction companies provide:

Prefabricated, or a modular house

A prefabricated house: around 90% of the works are done off-site at the shop before the future house is shipped and assembled at the final destination.The cheapest option on the market. There are a few popular trends on the housing market when it comes to prefab houses — for example, houses from shipping containers. Their price can be as low as $100,000.

Custom home

A unique house, specially developed for you by the builder's design team. Custom home has obviously higher cost to build: everything, from labor cost to interior finishes is more expensive in comparison to prefab houses.

Price ranges can vary significantly. According to the official data, the overall cost of a custom home is usually twice higher than of a modular house.


Luxury residences

High-end of the real estate market, these houses are listed for a median cost of $1 million and more. The final price of the square foot, depending on the quality of the luxury estate, can be $1000 or more.

How much money do you need to build your dream home?

"How much money do I need to build my own home?" — is the question that many people are asking themselves at a particular stage of life. Building your own house can truly come with a lot of advantages — and the main one is the opportunity to obtain exactly what you envision.

But, straight away, there are other questions to be answered: what kind of residence are you thinking of? What size should it ideally be? What materials is it going to be built from?

Simple logic: a little small home has a relatively affordable construction price. A high-end, luxurious residence with multiple stories and architectural flourishes will, naturally, be much more expensive.

Plus, don't forget the famous "Three L" mantra of the real estate market: "Location, location, location"!

Though according to HomeAdvisor, the average price to build a home in 2021 in the US was $296,652, in fact, the real price would totally depend on multiple criteria. Let's see what we need to consider.

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Building a house: a breakdown of how much it costs

An average construction price of $296,652, provided by the HomeAdvisor, would mean that a square foot of a typical 2594-square-foot house would be roughly equivalent to $115. This, in fact, is the median price for the lowest end of the market.

Future homeowners spend time and time more on the home building process. For example, in urban settings with high costs of living like in the Chicago, IL area, the average cost to build residential real estate can be as high as $400 per square foot and more, depending on the type of construction project, the material costs, the labor costs, and many other factors.

How to understand what the final cost to build consists of? Let's explore the main stages of the construction process with average costs in 2021/2022.

Getting necessary building permits: $20,000

Your building contractor is responsible for planning and preparation of the house construction. And the most important step — attaining all the building permit and other paperwork, required by your state. Costs would vary, depending on the size, the location of the plot — but also on local legal peculiarities.

A recent study, published by the NAHB, states that the "red tape" costs in the US can be as much as 22.8% of the value of a brand new house. Around 10% of this amount would be allocated to regulations around developing the lot. According to Fortress Home experience, the sum that needs to be allocated for the permits and preliminary inspections is around $20,000.

Drawing up house plans: $7,000

This stage involves having an architect draw up a plan for the house and your home builders' representative approving them with you — and then with the legal authorities.

A house without an approved blueprint simply is illegal to build: all floor plans have to be officially registered before the construction begins.


The price we provide here is for an average custom home of 2594 sq. ft. It usually varies from $3,000 to $10,000 so we're giving you an average of $7,000.

Clearing and preparing land: $3000

The amount of land required to clear for construction can vary drastically. Excavation and leveling of an "easy" plot for a single-family home of 2500 sq. ft are around $3,000. But if you need to demolish an existing home, the price can rise to $10,000 and more.

Labor costs: $130,500

Labor costs can also vary drastically — the final fee depends on the size and complexity of the future residential house. Home builders usually charge 30-60% of the total project cost. Average labor costs in the US are 44%: the rest goes to the construction cost, permits, design fees, and materials. If the cost to build the custom home is $296,652, labor costs (44%) will constitute $130,500 of this number.

Preparing and building the foundation $10,000

The average cost of laying the foundation for the house in the US is around $10,000. Average costs increase with extra material, reinforcement with rebar, and additional excavations. Preparing foundations and building them at a high end of the market can rise up to $35,000.

Framing: $35,000

Framing is the core of a house and the average costs that home builders charge for it varies from $20,000 to $50,000. Framing includes the overall home framing as well as trusses and general metalworking. Sometimes framers can also handle the floor covering the roof and flooring, and often they install the windows and doors. Similarly, frames help with sheathing, subfloor installation, and windows installation.

Basement: $25,000

Building a basement on average costs around $20 to $60 for each square foot. Therefore, the total construction costs of a basement can run from $10,000 to $30,000 and more. At the higher level, you can actually convert the finished basement to a living space with multiple rooms and a bathroom. The lower end of the budget will give you a basic finish with inexpensive materials and a few lighting and electric outlets.

Roof: $20,000

Home builders will usually price you around $20,000 for a brand new rooftop. The average cost of roof replacement is around $8,000.

Flooring: $8,000

The average cost of the new flooring for a single-family house of 2,500 square feet can vary from $5,00 to $10,00 per square foot. Here we give you a medium price, common at the market.

Home building materials cost: $148,000

Homebuilding materials cost about 50% of the overall construction costs. The quality and the amounts will define the final material costs. For example, vinyl siding will cost $2 for an area of four square feet or $4.99 for a three-story residential home with a roof. Stone, on the other hand, is available at a price of between $4 and $7 per square foot. Your home builder will provide you with the exact numbers, based on the area, the design peculiarities — and the overall quality that you are aiming for. But for our average-priced ($296,652) single-family home this sum will be $148,326.

Major systems: plumbing, electrical & HVAC system: $50,000

Installation costs of major systems in a brand new house can vary between $30,000 and $75,000. Plumbing, lighting, and HVAC are critical for the safe operation of your property. The size and nature of the system can affect the price of these installations. For example, a new 2,000 square-foot HVAC unit could cost you $5,000 to $10,000.

Plumbing is also one of the biggest systems and it's important to install it correctly and professionally. The total square footage will be one of the crucial factors when considering your overall costs. For new construction the average cost of the plumbing system can reach $10,000-$12,000.

Interior and exterior finishes and fixtures: $75,000

Next come the interior finishes — such as adding drywall insulation, exterior doors installation, flooring, interior walls, and all the other necessary components. Cabinets and countertops will be installed, walls painted and appliances will be connected. Once that's gotten done the construction will be practically complete. And you — can't wait until you can get the keys from your brand new house!

Major appliances: $10,000

Your own home also requires new appliances such as a fridge, microwave, and washing machine. If it's your first time buying large appliances it's advisable to research the prices so that you can add them to your calculations.

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Things to keep in mind when building custom homes

Before you sign the contract for building your custom home, perform a thorough online research and get estimates for all the work needed. Once you have your entire budget, it is usually a good idea to allow yourself a little extra wiggle room if things end up going faster than you originally planned.

Mortgage online is another important thing to consider. Look for the common interest rates and ask your builder if he can offer you better deals.

New construction energy efficiency

New construction is highly advised in accordance to the modern energy efficiency standards. A total house cost in this case can be up to 20-30% higher, but if you build a "green house":, you will save money in the future. For example, modern solutions can help to consume up to 21% less energy in heating. Entire home, made of modern materials, will be better insulated and comfortable.

When should I consider building a house?

Buying an existing home is generally a simpler and quicker process than building it from the ground up. Building the first house usually brings a great deal of stress and some decision making. But the new construction, especially performed by the modern standards, will last your family many generations up front.

A multi-generation housing is a major trend on the market today: don't think only about your own happy life in the freshly built house: imagine your children, grand-children, grand-grand-children living in it.

New home building is a fascinating process — start yours today! Give Fortress Home a call at 773-770-8607, let's discuss what we can offer to you and your family!


Our home building costs are affordable, and the quality of services is determined by more than 20 years of experience in the market!

Frequently Asked Questions

Is it cheaper to build a house or buy one built?

The closing costs will vary depending on the kind of the house you're looking for. For example, buying a prefab house can be twice cheaper than building a custom home of the same size. Don't know what to choose? Give us a call at Fortress Home at 773-770-8607 and we will provide you with an average cost to build the home of your dreams!

How much does it cost to build a 2000 sq ft house?

In the Chicago, IL area, where the headquarters of Fortress Home is located, the average cost to build varies from $290 to $349. Therefore, a more expensive house of 2000 square feet will cost you $698,000.

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